Which of the following statements is TRUE?
A)The fixed manufacturing sales-volume variance is rarely zero.
B)The difference between the allocated and the budgeted overhead is the production-volume variance.
C)The production-volume variance arises for both fixed and variable costs.
D)The fixed manufacturing overhead sales-volume variance can be written-off to cost of goods sold.
E)The production-volume variance arises only for variable costs.

Question

Quizplus · Accepted Answer

The production-volume variance is the difference between the allocated and the budgeted overhead, which is a fixed cost. The fixed manufacturing sales-volume variance can be written-off to cost of goods sold, but it is not necessarily rare for this variance to be zero. The production-volume variance arises for both fixed and variable costs, not just for variable costs.

Which of the Following Statements Is TRUE